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Sycamore Feels Heat as Rivals Tap Customer
The Wall Street Journal, 04/19/01 Enron India To Meet Dabhol Pwr Proj Lenders Apr 23 Dow Jones International News, 04/19/01 INDIA: Enron's India unit says lenders meet on April 23. Reuters English News Service, 04/19/01 Wessex Water parent plans major surgery The Daily Telegraph, 04/19/01 Real-time pricing cuts both ways UPSIDE Today, 04/19/01 COMMODITIES & AGRICULTURE: Aluminium smelting faces meltdown in north-west US: Fears are growing that the BPA's strategy of conserving energy could drive industry from the region, writes Gillian O'Connor: Financial Times; Apr 19, 2001 Nevada regulator seeks delay of $3.1 billion utility purchase Associated Press Newswires, 04/18/01 USA: Bandwidth trade struggles to gain footing. Reuters English News Service, 04/18/01 Technology Journal Sycamore Feels Heat as Rivals Tap Customer By David Armstrong Staff Reporter of The Wall Street Journal 04/19/2001 The Wall Street Journal B6 (Copyright © 2001, Dow Jones & Company, Inc.) SINCE OPENING its doors in 1998, fiber-optic equipment maker Sycamore Networks Inc. has depended on one customer, Williams Communications Group, for nearly all of its sales. In announcing a huge, two-thirds decline in expected revenue in its current quarter earlier this month, Sycamore said one reason for the drop-off was a decrease in business with Williams, an event that it added wasn't unexpected because most of the work required under a contract between the two companies is nearly complete. That explanation, however, omitted the fact that some competitors are winning new business with Williams as Sycamore struggles to bring new products to the market. In the rapidly evolving and brutally competitive optical-networking game, delays of this kind can be punishing. "There is a major advantage to being the first mover in this marketplace," said Salomon Smith Barney analyst B. Alex Henderson. Although Sycamore may have new offerings of its own before long, "getting in the game late doesn't solve their share-loss position." Sycamore, Chelmsford, Mass., sells products that transmit data and voice using light, rather than electricity, greatly increasing the capacity of existing fiber networks. Earlier this month, the company said shipment of a more powerful version of its SN16000 optical switch has been delayed because the company can't get enough of an essential part from suppliers. Sycamore wouldn't disclose the exact part in short supply, but said it affects the "grooming fabric" that allows carriers to break up their networks into smaller chunks. The delay is critical because rival Ciena Corp., of Linthicum, Md., has been in the market for nearly a year with a competing device that is winning new customers, including Williams. Robert Traill, vice president of contracts, logistics and engineering economics for Williams, confirmed that the Tulsa, Okla., data carrier now is making commercial purchases of Ciena's CoreDirector, but wouldn't quantify the buying. Also, Corvis Corp., of Columbia, Md., already is selling high-capacity, long-distance transport devices to Williams that compete with a Sycamore product scheduled for release this quarter. Mr. Traill said the contracts with Sycamore rivals aren't the result of any dissatisfaction with Sycamore, but part of a multivendor approach to outfitting the company's fiber-optic networks. He also said Williams continues to have a strong relationship with Sycamore. While Sycamore won't say how much business it currently does with Williams, that customer alone accounted for more than 90% of Sycamore's sales in fiscal 2000. But Sycamore's dramatic decline in business with its top customer at the same time its rivals are capturing new contracts concerns analysts. "I think there is dissatisfaction with their product," said Seth Spalding, of Epoch Partners, in San Francisco. "Their problems are deeper than a weakened" telecommunications spending environment. After talking to Sycamore and Ciena customers late last year, Michael K. Ma, the portfolio manager of the PBHG Global Technology & Communications mutual fund, dumped his entire position in Sycamore and tripled his stake in Ciena to about four million shares. Mr. Ma's fund held 2,868,000 shares of Sycamore last Sept. 30, making it one of the largest institutional owners at the time. "We did some industry checks and talked to customers and got the sense that [Ciena] was winning the rat race," Mr. Ma said. Sycamore executives declined to be interviewed for this story. A spokesman said Sycamore would have more to say about its strategy and financial situation on May 15 when it releases results for its fiscal third quarter ending April 28. The spokesman, however, said any product delays aren't fatal. "Sycamore's position is this game is just beginning, and to declare victory this early on is premature," he said. Scott Clavenna, president of PointEast Research, a telecommunications research firm, said delays with devices like the SN16000 are costly, but agreed that there is time for a rebound. The fiber-optic network market, he adds, "is just getting started." Sycamore is well-fortified to withstand a downturn. As of Jan. 27, the company reported having $1.4 billion in cash, cash equivalents and marketable securities -- a residual benefit from the highflying days following its initial public offering and a follow-on secondary offering made before the technology market collapsed. The company is led by Chairman Gururaj "Desh" Deshpande and Chief Executive Daniel Smith, a seasoned pair who previously ran Cascade Communications Corp., a networking-gear company they sold for $3.7 billion in 1997. Sycamore's 1999 IPO was one of the most successful of the decade. The shares rose 386% on the first day of trading and eventually peaked at about $190. As of 4 p.m. in Nasdaq Stock Market trading, Sycamore climbed 71 cents, or 7.9%, to $9.74. Sycamore bucked the trend set by many start-ups by becoming profitable before expected, and it beat Wall Street estimates by reporting net income of $13.8 million, or five cents a diluted share, in its fiscal second quarter ended Jan. 27. But instead of the expected $151 million in revenue, and a five-cent-a-share profit in the current period, Sycamore said revenue would be only $50 million to $60 million, with a loss of 16 cents a share, excluding restructuring costs and stock compensation. The company, which also cut its work force by 12% earlier this month, warned of further losses in the next several quarters. Sycamore doesn't yet have a well-diversified customer case. Last July, it said it had a contract valued at as much as $400 million with 360networks Inc. of Vancouver. A spokeswoman for 360networks, which recently announced it was cutting its capital spending this year by $500 million to a range of $3.5 billion to $4 billion, declined to specify how much the company is spending with Sycamore but noted the $400 million figure was a maximum. Sycamore also announced an agreement last year with Enron Broadband Services, the Internet division of Enron Corp., for as much as $200 million over three years. An Enron spokeswoman, however, said spending on Sycamore products hasn't approached the figure quoted in the news release. In its most recent quarterly report, Sycamore disclosed that its two largest customers after Williams weren't contractually committed to purchase a minimum quantity of products. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron India To Meet Dabhol Pwr Proj Lenders Apr 23 04/19/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) NEW DELHI -(Dow Jones)- U.S. energy major Enron Corp.'s (ENE) Indian unit Dabhol Power Co. will meet with its lenders April 23 to update them on the 2,184-megawatt electric power project in the western Indian state of Maharashtra, Dabhol's spokesman told Dow Jones Newswires Thursday. "I can confirm that a meeting of Dabhol Power Co. lenders is taking place in London April 23. The meeting has been called at the initiative of Dabhol Power to update its lenders on the current situation of the project. DPC has nearly 40 lenders that include Indian and international financial institutions," Enron India Ltd.'s spokesman, Jimmy Mogul, said. DPC has a controlling 65% stake in the controversial $2.4 billion project which supplies power to the State Electricity Board. The project is India's biggest foreign investment. The tussle between Dabhol Power Co., India's Maharashtra state government, the Maharashtra State Electricity Board and the government of India is still ongoing. As reported, DPC Wednesday served two notices of arbitration on the Maharashtra state government. In a statement, Enron India said the notices were served because the Maharashtra government had failed "to honor its obligations under the government of Maharashtra State Support Agreement and Supplemental State Support Agreement," signed in 1994 and 1996, respectively. DPC said in the agreements, the Maharashtra government had pledged to "support and encourage the further development and completion of the Dabhol project." It added that "without justification," the Maharashtra government has gone back on these agreements, which has "adversely and materially impacted DPC's ability to perform under its contractual agreements." The statement added that as part of the arbitration process, an independent three-person panel will be set up to determine whether the Maharashtra government has "failed to comply with its obligations." Under a 1996 counter guarantee agreement, the federal government is obliged to pay Enron when MSEB defaults. Enron invoked that guarantee in February, marking the first time in India's history that a company has invoked a federal guarantee, when the state utility said it couldn't afford to pay DPC. The state government finally paid $17 million in outstanding bills. DPC and the federal government recently started a conciliation process, to be governed by the provisions of the U.N. Commission on International Trade Law, with the aim of resolving DPC's latest dispute with MSEB. DPC says MSEB owes it 1.02 billion rupees ($1=INR46.8250) for power supplied in December 2000. For its part, the MSEB said it wanted the power bill to be offset against a INR4 billion fine it levied on DPC for what it said was the non-supply of power for intermittent periods between October 2000 and the end of January. Dabhol, India's largest private power plant currently under construction, was scheduled for commissioning in two phases. The project's first phase, a 740-megawatt power plant, has already been commissioned and phase two is due to be completed later this year. Critics object to Dabhol charging INR7.1 a kilowatt-hour for its power, compared with INR1.5/KWh charged by other suppliers. The various partners in DPC include: Enron Corp. with a 65% stake, Maharashtra State Electricity Board with 15%, General Electric Co. (GE) with 10%, and Bechtel (X.BTL) with 10%. -By Himendra Kumar, Dow Jones Newswires; 91-11-461-9427; himendra.kumar@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. INDIA: Enron's India unit says lenders meet on April 23. 04/19/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY, April 19 (Reuters) - U.S. energy giant Enron Corp's Indian unit has called a meeting of its lenders on April 23 to discuss the ongoing payment row with India's Maharashtra state government, a company spokesman said on Thursday. The meeting will be in London and will be attended by international as well as local lenders of the Dabhol Power Company (DPC), he added. The move comes amidst escalating tensions between Enron and Maharashtra over the inability of the state's utility to pay its monthly bills. The Maharashtra State Electricity Board (MSEB) has been defaulting on payments since last October for electricity purchased from Dabhol's 740 MW power plant on the state's west coast. The amount outstanding totals 2.26 billion rupees ($48.24 million). In an effort to compel payment, Dabhol has twice invoked a federal government guarantee to cover payment defaults by the state utility. Last week, Dabhol also issued a notice of political force majeure to Maharashtra. Force majeure is an event beyond the control of a contractual party that could not have been prevented. The dispute has already caused Enron to freeze most of its investment plans in India and has also affected foreign investment in India's power sector. "This meeting has been called to update the lenders about the situation," the DPC spokesman said. The Business Standard newspaper reported that Maharashtra no longer intends to buy power produced by the second phase of the Dabhol project, which is nearing completion. The $1.86 billion addition will nearly triple the plant's output capacity to 2,184 MW. "As far as Maharashtra is concerned, phase two is as good as scrapped," the financial daily quoted the state chief minister Vilasrao Deshmukh as telling reporters in Bombay on Wednesday. The state government signed a contract in the mid-1990's to buy the plant's entire power output. But a rise in the cost of naphtha, the fuel currently used to power the plant, and a decline in the value of the Indian rupee against the dollar, has inflated the cost of the power produced by the Dabhol plant beyond the price expected at the time the contract. That has made the power produced by the Enron plant twice the cost of power produced by other suppliers in the state, fuelling popular and political pressure to scrap the contract. ($1=46.84 Indian rupees). Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Wessex Water parent plans major surgery Sophie Barker 04/19/2001 The Daily Telegraph Copyright (C) 2001 The Daily Telegraph; Source: World Reporter (TM) WESSEX Water parent company Azurix has decided to break itself up, six months after the troubled American water group was taken private. The company, which is wholly owned by energy group Enron, has appointed investment bank JP Morgan to handle the break-up. Azurix is keen to sell its North and South American water interests and its German engineering business, Lurgi, first. Wessex Water, widely considered as the jewel in Azurix's crown, would be put on the block at a later stage, probably in a year's time. Azurix hopes to attract foreign bidders for Wessex, which could act as a launch pad for limited consolidation in the west and south west of England, where three small water-only companies operate. However, several leading foreign utility groups such as Germany's RWE and French group Suez Lyonnaise des Eaux already own large water companies and are barred from making any further major acquisitions under competition rules. Enron took Azurix private at $7 ( pounds 4.92) a share last October - just over one third of the water company's $19 float price in 1998. Apart from the Bath-based Wessex Water, Azurix owns small water businesses in the United States and concessions in Latin America, including a $489m franchise to supply water services to Buenos Aires. It was widely considered to have overpaid for the Buenos Aires contract in 1999, which has since been hit by trouble, including a pollution incident. Azurix declined to comment. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Real-time pricing cuts both ways Ryan Tate 04/19/2001 UPSIDE Today Copyright © 2001 Upside Media Inc. All Rights Reserved. Want to receive Executive Briefing in your email inbox? Subscribe to our free daily newsletter. Get-rich rip: Walk the tightrope of real-time pricing -- if you dare. It's working for eBay (EBAY). The Internet auctioneer is making a bundle bringing together buyers and sellers in a vast -- and vastly profitable -- secondhand market. Now it's driving growth in another niche: simple discounting. Anonymously sourced news reports Wednesday had the company expanding its Half.com division to consumer electronics and sporting goods from books, music, movies and video games. Half.com sells goods for at least half their original retail price and, unlike Priceline (PCLN), does not let buyers bid on goods. Still, it allows a kind of macro-haggling, allowing manufacturers to respond when customers at large ignore their products. Having a harder time playing low-margin broker is Enron (ENE), a leading builder of bandwidth-trading systems. Bandwidth markets are a boon to buyers right now, when a capacity glut has pushed down prices, and the trading networks have accelerated that process. But sellers and brokers like Enron are hard-hit and Enron fired 20 percent of its broadband staff earlier this month. Not only is demand and trading volume down, but overhead is growing, too, as telecom companies slide and credit quality becomes an issue. MORNING NEWS, OVER EASY Did Salomon Smith Barney give bad advice? The New York Times reported that advisers from Salomon Smith Barney gave bad advice to Microsoft (MSFT) employees about what to do with their stock options, resulting in lost money and hefty tax bills. Among the more egregious allegations is that the brokerage, which is Microsoft's "preferred broker," advised workers to pay tax bills by turning their options into stock and then borrowing against the shares -- a high-risk practice generally employed by speculators and one that generates large interest payments for brokerages. Covisint names Street vet CEO Online auto-parts exchange Covisint named Wall Street veteran Kevin English as its CEO. English had worked as managing director at Credit Suisse First Boston and CEO at TheStreet.com (TSCM). The site was founded by GM (GM), Ford (F) and DaimlerChrysler (DCX), who until now had each contributed a co-CEO to the venture. Some in the auto industry were shocked that Covisint did not choose someone with more manufacturing experience. VeriSign to accept non-English symbols in domain names Master Internet registrar VeriSign (VRSN) said it would begin registering domain names with symbols used in languages in the Middle East, Southeast Asia and the Indian subcontinent. The .com, .net and .org top-level domains will be able to carry domains with hundreds of symbols from nearly two-dozen language scripts. EXTRA SHOTS Pink slips Hewlett-Packard (HWP) tripled its job cut plan to include 4,700 employees, or 5 percent of its workforce, as international sales weakened and as the company worked to slim management. SportsLine (SPLN), the Web sports network, said it would fire 90 employees, or about 19 percent of its workforce, as it reported a widening first-quarter loss. Tellabs (TLAB), which makes switching equipment for phone networks, said it planned to cut 500 workers and leave vacant 1,100 open positions as spending on network equipment dwindles. Daily deals LoudEnergy , an online music company, will give an undisclosed sum for Riffage , a diversified digital music play. The European Union agreed to drop charges against Microsoft (MSFT) after the software company agreed to alter technology pacts with two European cable TV companies to give the companies more freedom to choose settop box technology. Gateswatch Bill Gates made about $2.8 billion in the big rally as Microsoft shares rose 6 percent. The Upside.com 150, an unweighted, all-tech index, was up 8.5 percent. The chief software architect was worth $47.2 billion at the end of trading, based on his company stock holdings. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. COMMODITIES & AGRICULTURE: Aluminium smelting faces meltdown in north-west US: Fears are growing that the BPA's strategy of conserving energy could drive industry from the region, writes Gillian O'Connor: Financial Times; Apr 19, 2001 By GILLIAN O'CONNOR The Bonneville Power Administration, the US federal agency responsible for providing low-cost power to customers in the north-western US, appears to be in danger of killing the US aluminium smelting industry it helped to create more than 60 years ago. Last week, Steve Wright, the BPA's acting administrator, presented the region's smelters - which account for one-quarter of total North American smelting capacity - with an unpalatable choice. Either they agreed not to take power from the BPA for two years from October, when their new contracts start, or they faced trebled or quadrupled power prices under the new contracts. Since the smelters would not be able to operate economically at such prices, either suggestion in effect means that the smelters will be out of business for two and a half years. Mr Wright said the BPA did not intend to drive the smelters from their traditional base in the region - but analysts fear that this may be the result. The continuing power crisis on the US west coast has meant that over the past year, roughly 90 per cent of the 1.6m tonnes a year smelting capacity in the north-west has been closed down, on a "temporary" basis. The rising cost of power on the free market - which has surged from Dollars 25 a megawatt hour to Dollars 300 - forced them to close some potlines. Moreover, the fact that the aluminium groups could make more money by reselling their low-cost BPA power than by using it to produce metal tempted them to close most of the remainder. As the power crisis has tightened, the terms proposed by the BPA for the smelters' new five-year contracts have got steadily worse. Last autumn, the BPA said it would cut the quantity of power available to 1,500MW - about half the smelters' total requirements - and increase the price by around a third. Then in January it said the price increase would be around 60 per cent overall, and possibly as much as 95 per cent in the first year of the new contracts. Now the agency is talking of price increases of about 200-300 per cent, which suggests rates of between Dollars 70 and Dollars 90/MWh. CRU, the independent analysts, has calculated that most smelters could not operate economically at above Dollars 40/MWh. The North-west's power problems were triggered by last year's crisis in California, as shortages and ensuing high wholesale prices in the south sucked in power from other states. But they have been exacerbated by the unusually low levels of winter rain and snow in the region, which has left reservoir levels unusually low. The BPA generates around 3,000MW less power than the 11,000MW its customers want to buy. It can either plug the gap by buying in free-market power - thus raising the cost of its own - or persuade its customers to cut their demands. Its strategy is to put the utilities, which supply individuals and small businesses, first. The agency last week asked the utilities to cut usage by 5-10 per cent. The aluminium companies are being asked to go off-line for two years, saving the whole of the 1,500MW provisionally allotted to them. In effect, they are being told that power prices will be available, as long as they don't try to buy any. The situation after October will be substantially worse for the smelters than it has been so far, because they will not be able to profit by re-selling BPA power. From October the BPA's proposed compensation amounts to little more than giving the aluminium companies enough money to pay their laid off workers. In the long term, the BPA's strategy is to wean the smelters off BPA power altogether and encourage them to build alternative power sources. Golden Northwest, which has two smelters in the area, recently agreed a Dollars 1.6m deal with the BPA under which the agency would build and operate a new gas-fired turbine plant. McCook Metals has acquired a smelter from Alcoa and shut it down while it makes it more energy-efficient and develops a new turbine energy plant with Enron. Assuming that enough additional energy capacity is built, West Coast power prices could ease in a couple of years. But analysts say that does not necessarily mean that aluminium companies will reopen all their idle capacity. In the short term, the reduction in US aluminium output - it is now about 30 per cent lower than at the start of 2000 - will merely balance the expected cuts in demand, and prevent the market swinging into surplus. But "in 2002 and 2003 the market could be extremely tight", says Jim Lennon of Macquarie Equities. Copyright: The Financial Times Limited Nevada regulator seeks delay of $3.1 billion utility purchase 04/18/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. Copyright 2001. The Associated Press. All Rights Reserved. LAS VEGAS (AP) - Nevada's top utilities regulator is asking the Securities and Exchange Commission to delay the proposed $3.1 billion sale of an Oregon utility to Nevada's Sierra Pacific Resources. Don Soderberg, chairman of the state Public Utilities Commission, said Tuesday he asked the federal agency to postpone action because of pending Nevada state legislation that would affect the deal. Sierra Pacific agreed in late 1999 to purchase Portland, Ore.-based General Electric from Enron Corp., but has struggled to satisfy financial requirements that the SEC might impose. Sierra Pacific has until May 5 to complete the deal. Meanwhile, the Nevada state Assembly passed and the Senate amended legislation that would require PUC approval of all acquisitions after Jan. 1. The Legislature also is moving to halt the sale of all Nevada power generating plants and to scrap energy deregulation. Sierra Pacific Resources is the parent company of Sierra Pacific Power Co. in Reno and Nevada Power Co. in Las Vegas. Sierra Pacific had planned to use its sale of its generating stations to help finance the acquisition of General Electric in Oregon. Faye Andersen, company spokeswoman, said the utility opposes legislation that would require PUC approval of acquisitions. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Bandwidth trade struggles to gain footing. By David Howard Sinkman 04/18/2001 Reuters English News Service (C) Reuters Limited 2001. NEW YORK, April 18 (Reuters) - Hailed as a new frontier for financial markets, bandwidth trading is struggling to get a footing as capacity piles up, prices fall and expectations float back to earth. A supply glut, especially on long distance routes between large cities, is dragging down prices and investment on new capacity has slowed considerably as demand flags. But trading will pick up in two to three years as the market matures, say analysts. "There is nothing going on out there. The business is viable, but we are ahead of the curve," said Merrill Lynch analyst Donato Eassey. Bandwidth is the transmission capacity of an electronic line used to send data from one point to another, as on the Internet. The trading of bandwidth helps facilitates deals and hedges against risk. While the bandwidth market was all the rage the previous three years, this year has seen a fallout in the industry. Enron Corp., billed as the biggest bandwidth trader, said April 6 it would cut 20 percent of the jobs at its broadband unit because of slow demand for streaming media products to personal computers. "There will be some shake-out in demand, growth and pricing, but long-term demand and growth will be there," said Seth Libby, analyst at consulting firm The Yankee Group. MARKET FAILURES Market inefficiencies, such as unresolved issues like credit and market enforcement, have retarded trading. What is needed, according to San Francisco-based online exchange RateXchange Corp. , is a standardized contract that would provide the framework for commodity-like trading. Without such agreement, buyers and sellers of bandwidth need to agree on new terms for each transaction, said Michael Rose, RateXchange's director of business development. "We do not yet have a fully functioning market," said Rose. However, analysts liken today's trading market to the power market, which took more 10 years to get off the ground. "Today's market problems are just growing pains," said Rod Kuckro, managing editor of the Bandwidth Market Report, which is published by McGraw Hill Co. Kuckro sees growth picking up over the next three years. FALLOUT Market inefficiencies are not the only problem bandwidth trading faces. A supply glut has dragged down prices. Exact numbers are hard to come by in the bandwidth trading market. But industry experts say only about 10 percent, or even less, of existing fiber optic capacity for bandwidth is lit, or in use in the United States. "Obviously there is some capacity problems out there. And there will be funding problems going forward," said Credit Lyonnais Securities analyst Gordon Howald. It is now cheaper to buy or lease lines than to take the risk of digging in the ground and laying new lines. As a result companies are not investing as much in construction. For example, Enron slashed its capital spending on its fiber optic network to about $250 million this year from an earlier estimated budget of $750 million. Demand for capacity has also fallen short of expectations. "The traditional bandwidth business plan read 'just build it and they will come,' but this did not pan out," said Libby. Consequently, today's market has more sellers than buyers. And as new players enter the market, like Global Crossing Ltd. and energy companies Dominion Resources and Dynegy Inc. , competition has heated up. But this might just be what the doctor ordered. As prices keep falling, carriers, who were reluctant to embrace bandwidth trading, are taking a long-look because of the increased efficiencies offered by trading. "Somewhat perversely, this fallout might hasten trading as companies are forced to compete more fiercely with new players," said Kuckro. LAST MILE HURDLE Think of driving from New York to Washington. The highway is mostly free of congestion, but traffic jams abound in the cities. The same holds true for bandwidth connections. Bottlenecks in the last mile have kept prices high, despite a glut in long-haul capacity and unused dark-fibers Bandwidth trading, which does not always provide a loop-to-loop service, suffers as a result. "Nobody want to buy long-haul capacity and then haggle and worry about the local loop," warns Seth Libby, who said he is unaware of any bandwidth trades that included the final link. However, analyst see the last mile problem as just another hurdle bandwidth trading will get around to deal with. "Somebody is going to step up to plate," said Libby. While analysts expect the majority of bandwidth deals to remain carrier-to-carrier, the trading market is expected to blossom as the kinks in the system get ironed out. "Everyone is dressed for a party, but there is no party to go to yet," said Donato Eassey. "But once we get the paths and the customers down the party starts." Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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